Government secures record pipeline of clean cheap energy projects
Sixth renewables auction delivers record smashing 131 clean energy projects powering equivalent of 11 million homes.
- After disappointing results in 2023, new results move Britain forward with mission to become clean energy superpower
- new wind and solar farms to support mission to bring bills down and boost economic growth
- offshore wind revitalised in the UK, righting the wrongs of previous auction round
Millions of homes and businesses across Britain will be powered by a new supply of clean, cheap, homegrown energy as a record number of projects receive funding through the government’s most successful renewables auction to date.
In a key milestone towards delivering clean power by 2030, the latest auction round delivered 131 new green infrastructure projects. This makes it the biggest round ever with significant numbers for onshore wind, solar and tidal energy, which will power the equivalent of 11 million British homes.
The results are a marked improvement on the previous auction round in 2023, which saw zero offshore wind projects agreed.
These successful results come after the government last month moved quickly to increase the budget by 50% – a record funding uplift and 7 times bigger than the previous round’s pot.
As a result, offshore wind is back for business in UK waters – the backbone of the clean energy mission – with 9 contracts awarded including securing both what will be Europe’s largest and second largest windfarm projects, Hornsea 3 and Hornsea 4 off the Yorkshire coast.
A new rollout of low-carbon electricity is a key step for UK energy independence and energy security, helping protect families and businesses from spiking global fossil fuel prices.
Projects have been agreed at well below the upper limit on the price set for the auction – meaning the government has bought a record amount of clean power at much lower cost to consumers than the maximum price – providing value for money and cheap power.
Funding awarded today will also help support new green jobs across the country, increasing prosperity in industrial heartlands and rural communities, and unlocking green economic growth from the Scottish Highlands to the Suffolk coast.
Energy Secretary Ed Miliband said:
We inherited a broken energy policy, including last year’s disastrous auction round which gave us no successful offshore wind projects.
Today we have now achieved a record-setting round for enough renewable power for 11 million homes, essential to give energy security to families across the country. It is another significant step forward in our mission for clean power by 2030 – bringing Britain energy independence and lower bills for good.
These results show that together, this government and the energy industry are securing investment into our country. This auction has produced a record number of solar projects bolstering our mission for a solar revolution, we have powered forward with onshore wind, secured the largest commercial floating offshore wind project in the world and got the offshore industry back on its feet.
As we accelerate our plan for clean power by 2030 the government will work with the industry on how we can build on this success to ensure we can go even further and faster to deliver the power we need.
On the back of this successful auction, the Energy Secretary is working with the industry to accelerate ways that the Contracts for Difference system and other energy policies can be expanded, so that more renewable energy, including offshore wind, can be connected to the grid, and quicker.
The 131 projects this year is the biggest auction to date – exceeding the 92 projects delivered in the last auction round.
This includes:
- the largest offshore windfarm project in Europe - the Hornsea 3 project off the Yorkshire coast
- the largest floating offshore wind project in the world to reach market, Green Volt, which is double the size of Europe’s total installed floating offshore wind capacity
- 6 new tidal projects, building on the UK’s world leading position, with just under half of the world’s operational tidal stream capacity being situated in UK waters
- a combined 115 solar and onshore wind projects, which is more than the total number of projects delivered in the last auction round
Energy Minister Michael Shanks said:
Securing new wind turbines, solar panels and cutting-edge technologies such as tidal will boost growth, catalyse investment and support good jobs across Great Britain.
We’ve done this while ensuring value for money for billpayers, delivering the biggest auction round to date at competitive prices, helping turbocharge our mission for energy independence and clean power by 2030.
CEO of Low Carbon Contracts Company, Neil McDermott, said:
We are delighted with the outcome of Allocation Round 6 (AR6) which has awarded contracts to the largest number of projects ever.
The results of AR6 increase our total renewable electricity CfD portfolio to 39GW and 372 contracts. CfDs support technologies including offshore and onshore wind, solar, as well as emerging technologies of floating wind, tidal and geothermal.
The success of this allocation round not only boosts our ability to decarbonise the economy and enhance energy security, but also unlocks exciting new opportunities for innovation and growth. We look forward to working closely with our new generators to deliver these projects, accelerating the delivery of net zero and a sustainable, low-carbon future.
Today’s announcement is the latest step the government has taken to accelerate the mission for clean, secure power by 2030. In just 3 months the government has:
- lifted the ban on onshore wind in England
- launched Great British Energy in partnership with the Crown Estate, backed by £8.3 billion of new money, which is estimated to create up to 20-30GW of new offshore wind developments reaching seabed lease stage by 2030
- approved 3 major solar farms powering the equivalent of around 400,000 new homes
- launched its Clean Energy Mission Control centre, led by former Climate Change Committee Chief Executive Chris Stark, to accelerate the deployment of clean power
All these measures combined will support the mission to decarbonise the electricity grid by 2030 and hit net zero in 2050, helping transform the country into a clean energy superpower.
Notes to editors
Funding is awarded through the government’s Contracts for Difference scheme which provides developers with subsidies for clean electricity projects across Britain with a built-in design to keep costs low for billpayers.
During periods when wholesale electricity prices are higher than the fixed CfD strike price awarded, generators pay the difference back into the scheme, which can help to reduce energy bills.
This happened when wholesale electricity prices spiked during the energy bill crisis of 2022/23. Over Winter 2022/2023, Contracts for Difference payments reduced the amount needed to fund government energy support schemes by around £18 per typical household.
This estimate is based on analysis of the 2022/23 Ofgem price cap and wholesale cost allowance methodology for Q4 2022 and Q1 2023.
All technologies successful in AR6 cleared at significant discounts to the maximum prices, demonstrating the value delivered to the billpayer through the competitive auction. In addition, published evidence on Electricity Generation Costs demonstrates that intermittent renewable electricity sources like offshore wind, onshore wind and solar PV are the cheapest sources of new electricity generation to build and operate.
The homes powered estimate reflects the equivalent number of homes that could be powered based on an estimate of the annual generation from the capacity procured in AR6. It is not possible to continuously power a home through intermittent renewables – this capacity will work alongside the rest of the electricity system to power homes and businesses. The estimate is calculated using household consumption estimates sourced from the published Subnational Electricity and Gas Consumption Report and technology specific load factors published in the CfD Allocation Round 6 Standard Terms Notice. The actual generation will vary based on site specific factors.
Comparisons of global offshore wind and floating offshore wind project sizes are based on analysis of RenewableUK EnergyPulse global projects data and include projects that have reached market (operational, under construction or secured financing).
See the full list of Contracts for Difference Allocation Round 6 results.